Obamacare: Down for the count?

There are unofficial reports that 40,000-50,000 people have succeeded in purchasing an insurance plan through healthcare.gov, the home of the federal-run health exchanges. The original plan though was about 10 times that signed up by now, and ultimately 7 million.

If enrollment remains anemic, there will be plenty of pain to go around. The question is, who gets hurt the most?

“We have enough reserves for a year, year and a half, but 200 people in a year would be a problem,” saysPeter Beilenson, who runs Evergreen Health Co-op in Maryland.

Evergreen, which was created started to cash in on Obamacare, is the type of firm that could lose the most if enrollment remains flat. Since the exchanges went live in October, “We have seven people we’ve gotten on the exchanges,” Beilenson said. “At least we think we’ve got seven people.”

While Evergreen is closing in on contracts with some small businesses, Beilsen says he needs nearly 10,000 customers to stay in business.

It’s a different story for the big insurers.

They get most of their business from big employers, so they're not depending on customers brought in by Obamacare to insure their success. In addition, many of those new customers could have the types of illnesses that prevented them from being insured in the past, illness that can hit the bottom line.

But healthcare consultant Robert Laszewski says losing money isn’t the insurance industry’s top concern at the moment..

“If this doesn’t work then what’s the next chapter in America’s political debate over healthcare reform, and how will that impact them,” Laszewski says. “Do not underestimate how much the insurance industry wants Obamacare to work, so we can put this long term political soap opera about healthcare reform behind us and move on.”

Put another way, the unknown is a lot more terrifying than microscopic enrollment numbers at least in the first year of the ACA.

Harvard health economist David Cutler says if many uninsured Americans turn their backs on the exchanges, it will create high-risk pools with the sickest and most expensive patients.

“All high-risk pools that we have seen have become stunted. Enrollment is limited. Premiums are very high. Cost to the government becomes very high,” he says. And then the system collapses.

Cutler says if that happens, many of the 50 million Americans who are uninsured today will stay that way.